Lawmakers cut HUD's construction fund for the poor

On Nov. 17, Congress slashed funding for the Department of Housing and Urban Development's (HUD’s) construction fund for the poor by 38 percent, according to The Washington Post. Lawmakers also demanded that HUD establish measures to root out stalled housing projects.

Housing advocates opposed the cut to the $32 billion HOME Investment Partnerships Program, which provides grants to local governments for housing construction and renovation, home repairs and down payment assistance. A partial budget bill passed that would decrease the HOME program's budget from $1.6 billion to $1 billion.

"I've never seen anything else that steep," says Sheila Crowley, president of the National Low Income Housing Coalition. "The impact is huge. It will have a ripple effect throughout the system."

Congress has been scrutinizing the HOME program and held two oversight hearings to try to gauge the status of thousands of HOME-funded construction projects, as well as HUD's monitoring of local housing agencies that receive funding. An investigation by The Washington Post in May discovered that HUD had failed to track the progress of its affordable–housing projects and hundreds of deals throughout the U.S. were delayed or uncertain.

HUD officials repeatedly have defended the program, saying most projects are completed successfully and the program has delivered 1 million units of housing during the past 20 years. However, HUD has submitted to Congress an overhaul of the program's regulations to strengthen standards for developers and require more timely housing construction.

The bill passed Nov. 17 makes various demands, including local housing agencies having to certify that developers have financial capacity and building experience; the HOME money being repaid if construction is not completed within four years; and HUD must improve its project tracking and report back to Congress by March (and annually after that) regarding the status of all HOME funds older than five years.